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Florida Business, Whistleblower, & Securities Lawyers / Blog / Fraud / Costa Rican Citizen Convicted in a Half-Billion Dollar Fraud Scheme

Costa Rican Citizen Convicted in a Half-Billion Dollar Fraud Scheme

Minor Vargas Calvo (“Calvo”), a citizen of Costa Rica and president and majority owner of Provident Capital Indemnity, Ltd. (“PCI”), was convicted for carrying out a half-billion dollar fraud scheme, with more than 2,000 victims in the United States and abroad, during the period from 2004 to 2010. Calvo was convicted by a federal jury in Virginia of charges related to mail and wire fraud and money laundering.

According to evidence at his trial, PCI sold financial guarantee bonds to companies that sold life settlements, or securities backed life settlements, to investors. PCI marketed the bonds to its clients as a way to alleviate the risk of the insured individuals living beyond their life expectancy. The clients then told their investors that the bonds were a way to ensure the investors received their expected return on their investment, irrespective of whether the insured lived beyond his or her life expectancy.

Testimony at trial showed that Calvo and PCI misled PCI’s clients and investors regarding the company’s ability to pay claims when due on the financial guarantee bonds. The evidence further revealed that Calvo had an auditor prepare false financial statements that reflected PCI had entered into reinsurance contracts with major reinsurance companies.

According to the government, PCI sold at least $485 million of the financial guarantee bonds to life settlement investment companies, who in turn sold investments purportedly backed by PCI’s bonds. Clients who purchased PCI’s bonds were required to pay 6-11% of the underlying settlement in premium payments before PCI would issue the bonds. Evidence at trial showed that Calvo spent more than $23 million of his ill-gotten gains to fund a professional soccer team in Costa Rica and to fund lavish lifestyles for his family and himself.

Calvo is set to be sentenced on October 23, 2012. He faces up to 20 years in prison for each fraud count and up to 10 years in prison for each money-laundering count.

Investors nationwide who have been the victim of financial fraud, may contact the Florida securities arbitration attorneys at Rabin Kammerer Johnson for a free and confidential consultation by calling toll free at 877.915.4040.

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